FRANKFURT Deutsche Bank (DBKGn.DE) said its full-year target of 10 billion euros ($13.3 billion) profit before tax is no longer within reach as the European debt crisis takes its toll on global markets.
"The intensifying European sovereign debt crisis led to sustained uncertainties among market participants in the third quarter and thus to significantly reduced volumes and revenues," Chief Executive Josef Ackermann said in a statement on Tuesday.
The bank did not give a revised figure for full-year profit.
Deutsche Bank shares fell 5.5 percent by 1000 GMT, underperforming a 4 percent drop in the STOXX Europe 600 Banks Index .SX7P. The bank's five-year credit default swaps were 21 basis points wider at 212 basis points after the announcement, according to Markit data.
Banks across the globe have been hammered in recent weeks by deepening fears about slowing markets.
Ackermann said Deutsche Bank had boosted its liquidity buffers to more than 180 billion euros from 150 billion previously and did not face a funding squeeze.
"Deutsche Bank had absolutely no refinancing problems, neither in 2008 nor in 2011," he said at a financial conference.
Analysts had expected lower earnings after the bank's finance chief Stefan Krause said last month that its profit target hinged on a recovery in European capital markets.
Germany's flagship lender had previously forecast 10 billion euros pretax profit from core businesses, excluding one-off factors.
"After a disappointing third quarter, particularly in investment banking, we've been forced to adjust our target," Ackermann said.
Before Tuesday's announcement, Deutsche Bank had been expected to post a 2011 pretax profit of 7.72 billion euros, according to Starmine's SmartEstimate. That, however, included one-off charges, and corporate investments, areas Deutsche Bank has excluded from its target definition.
Since September, half the 34 analysts following Deutsche Bank have revised their full-year earnings estimate downward, by an average of 10.3 percent, Thomson Reuters Starmine shows.
The bank will also take impairment charges on Greek sovereign debt of about 250 million euros and cut about 500 jobs, mainly outside its home market, it said.
The lender's Corporate Banking & Securities (CB&S) division suffered in particular from market jitters in the third quarter, Deutsche Bank said.
As a result, and also due to "operating costs relating to an indirect tax position" third-quarter results at the CB&S unit will come in significantly lower than expected, it added.
Global stocks hit a fresh 15-month low on Tuesday while the dollar neared a nine-month peak on growing doubts over Greece's ability to avert a default that would spark a banking crisis in Europe and accelerate an economic slowdown.
Concerns about Dexia's (DEXI.BR) exposure to Greece and a Moody's warning about its liquidity pummeled the Franco-Belgian financial group's shares.
That prompted the Belgian finance minister to say that Belgium and France, which are both shareholders, would come to Dexia's rescue if needed.
Barclays analysts last month said they expected U.S. investment bank Goldman Sachs (GS.N) to report a quarterly loss, only the second in its history.
Ackermann has said that if the weaker market activity seen in August continued in September and October, Deutsche Bank would have to think about job cuts.
In late July, the Frankfurt-based bank warned that reaching its target was "dependent on swift and sustained resolution of the European sovereign debt crisis and a return to a significantly improved operating environment in the second half."
($1 = 0.753 Euros)
(Additional reporting by Natalie Harrison and Andrew Perrin, IFR Markets in London; Editing by Sophie Walker)